AUD/USD retreats from daily tops at 0.7360s down to 0.7315 on positive US Retail Sales

• AUD/USD dipped 30 pips as US Retail Sales for October grew the most in seven months.
• US Industrial Production crushed expectations, boosting the greenback.
• RBA’s Governor Philip Lowe said that data would not support a rate hike in 2022.

During the New York session, the Australian dollar falls, as better than expected US Retail Sales, seems to convince USD bulls to support the greenback against the AUD, prompting a 23 pip downside move on the announcement. At the time of writing, the AUD/USD is down some 0.42%, trading at 0.7315.

US Retail Sales for October smashed September's reading

In the New York session, the US Census Bureau revealed October’s Retail Sales which increased by 1.7%, more than the 1.4% foreseen by analysts, crushing the 0.8% September’s number. Further, excluding Autos, sales for the same period expand at the same pace that the headline, 1.7%, higher than the 1% estimated.

The jump in retail sales is the largest in seven months and followed a revised September figure. It is worth noticing that figures are not adjusted for price changes to reflect elevated prices. Receipts at gasoline stations jumped 3.9%, the highest since March, reflecting how people are paying some of the highest prices in seven years.

Some minutes later, US Industrial Production for October followed Retail Sales footsteps,  rose by 1.6%, better than the 0.7% expected by economists. 

RBA’s Governor Philip Lowe said that recent data would not support a rate hike in 2022

Meanwhile, in the Asian Pacific session, the Reserve Bank of Australia (RBA) revealed its monetary policy minutes. The central bank reinforced its previous posture that the cash rate will stay at its current level until 2024 unless wage growth and inflation targets are met. Further, RBA Governor Philip Lowe said that the last data does not guarantee a rate hike in 2022.

Later on the day, Fedspeakers will cross the wires. Atlanta’s Fed Raphael Bostic and Richmond’s Fed Thomas Barkin will speak at 17:00 GMT. At 20:30 GMT, San Francisco Fed’s Mary Daly would be the last policymaker to hit the wires.

Therefore, AUD/USD traders might expect further downward pressure on the pair. Central bank policy divergence, between the Fed and the RBA, would be the main driver of the price of the pair, but also market sentiment needs to be considered, as a tailwind for the AUD/USD.